Crippling Debt

DebtyMcDebty

Hey All,

Looking for some advice on the below, I'm stuck and I don't really know what to do now I'm 2 weeks away from not being able to travel to work anymore as I can't afford the fuel without having food to eat. 

Monthly income : 3700 currently 750 in overdraft.
Debts: credit card #1 £11000 (maxed)
            credit card #2 £5200
            credit card #3 £2800
            loan £10500
            

Expenses:
Mortgage - £620
Insurance - £150
Credit card payments - £600
Car - £471
Separation agreement - £750 (Wife)
TV licence - £15
Electric/Gas - £260
Loan - £260
Fuel - £600

These are the minimum payments on things. I need to use a car because I work in remote areas with no transport links.

Thanks

Brie

Well I'd start by finding out where the nearest to your route is the community fridge and get referrals to the food banks.  FB referrals can be done via citizens advice (by phone I think) and GP surgeries.

Have a look on the top stickies here  for the SOA and fill that out to get a full proper budget.  

Call the credit cards and bank loan and tell them you won't be making any payments for 3 months while you get yourself sorted.

Stop paying your TV license as you are paying for 6 months ahead of today so that will gain you a bit of breathing space too.  

Take a deep breath and let us help you find a way to make things more tolerable.  

stu12345_2

sell things, I had same situation as you, I sold playstation, newish dvds, old jewellery, ear pods, headphones 

CEX shop was a lifesaver and eBay.

put your petrol and food on a credit card that still isn't maxed, then tell them you are in difficulties 

fatbelly

Loans and credit cards are non-priority debts so you can stop paying or pay below the contractual amount if you need to. A default will go on your credit file at 3-6 months in arrears, but this isn't the end of the world.

With the tv licence - do you need one? If you do not watch live tv there is an opt-out form on the TVL website. If you do want to pay for one by instalments, the quarterly payment plan is a better scheme 

You need to keep the car legal and maintained so don't skimp there

As for the overdraft...

https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

Mark_d

A net income of 3700 per month is very healthy.
You have debts on 3 credit cards plus overdraft and loan.  After your overdraft I assume the credit cards are your more expensive debt.  It it possible to consolidate your loan & credit card debts so that you have a single low rate loan to pay off?  I don't know if it is possible for you to increase the borrowing on your mortgage, as this would likely be the cheapest borrowing you can get.
I think the biggest issue here is that you manage to spend more than you earn.  I understand that you need a car for work but £471 per month seems a lot.  You could buy a reasonable 10 year old car for £4000.
We pay under £150 per month for gas and elec - and we both work from home.  Why is your bill significantly higher?  Can you do anything to reduce this bill?
£600 for fuel sounds a lot.  How many miles do you do?  Maybe you can save money here buy getting a car more suited to your driving needs.

tizerbelle

Mark_d said:

 I don't know if it is possible for you to increase the borrowing on your mortgage, as this would likely be the cheapest borrowing you can get.

DO NOT do this.  You will convert unsecured debts to secure debts if you do this -  never a good idea, ever

ETA: Please follow the advice given in this thread https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps#latest 

sparks_2023

Have you missed off Council Tax from your list of expenses or has this been paid for the full year ?

The non-secured debt ( credit cards, overdraft and loan ) are your very lowest priority right now - lower than food, council tax, vehicle fuel and utility bills etc.

I imagine you will need to default on some ( all ) of your unsecured debt - but remember 4 defaults is no worse than 1 and your default-free date on your credit files is 6 years after the date of your latest default.

Are any of your credit cards/loan with your current account bank ? They have the right to take money directly from your account to pay their own debts so beware of this.

enthusiasticsaver

That budget is not sustainable as it comes to over £3700 even without food or anything else. 

Why is the insurance so high?  Is that house or car insurance?
How did you come to that £750 payment to your ex wife.  Is that child maintenance? 
If you cannot survive without credit cards then you might want to look at a DMP.  That means defaulting on the credit cards and loan.  Do not add the debt to your mortgage.  Your car payment is quite high.  Is it feasible to trade it in for something cheaper?  The fuel costs are crippling too. 

Why no water, council tax, broadband or mobile/landline costs?  There are a lot of gaps so you might want to do a full soa. There is a link on this thread. 

In Debt and Wannabe Debt Free? First Steps! - Page 2 — MoneySavingExpert Forum